CoinFLEX: Counterparty 'Uncertainty' Causes Halt in Withdrawals
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"Due to extreme market conditions last week & continued uncertainty involving a counterparty, we are announcing that we are pausing all withdrawals," CEO Mark Lamb wrote in a company blog post.
FLEX Coin on Hold
The company's native cryptocurrency, FLEX coin, futures, and spot trading will be on hold. Like Binance's BNB, consumers of CoinFLEX utilize the coin to lower trading costs on the exchange. As it liquidated its overly leveraged crypto-asset despite falling market prices, Three Arrows became one of the most prominent institutional victims in the cryptocurrency sector this month. The hedge fund was a significant player in the digital asset market for many years; it recently led a $9 million funding round for the NEAR protocol and numerous others. The business has significant holdings in Terra, a top-ten cryptocurrency that fell to zero with the demise of its related algorithmic stablecoin, TerraUSD (UST).
Collapsing Market Prices
Businesses exposed to Three Arrows were compelled to behave similarly to CoinFLEX today. This month, the withdrawals from the staking platform Finblox, which 3AC had invested, were minimal. In the meantime, due to associated "risk events," the Asian cryptocurrency lending platform Babel Finance has completely halted withdrawals. Cryptocurrency broker Voyager Digital is one of the most recent businesses to experience the consequences of 3AC's bankruptcy. After the company's $661 million exposure to 3AC was made public on Wednesday, its stock crashed by 60%. On Thursday, the corporation reduced its daily withdrawal cap by 60%.
